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Germany caps drug prices

Nature Biotechnology volume 29, page 96 (2011) | Download Citation

Germany has enacted a law imposing price controls on newly licensed medicines. In the new system, the manufacturer's launch price will be valid for one year only. After that, the amount paid by health insurers will be capped at a nationally determined level, based on a preliminary assessment of the medicine's benefits. If it has no extra therapeutic benefit, reimbursement will be set at the same level as a medicine already on the market. The Medicines Market Restructuring Act, or AMNOG, will apply to most novel biotherapeutics, except orphan drugs where no comparable existing therapies exist, and whose annual sales remain below €50 ($64.5) million. According to Germany's Association of Research Pharmaceutical Manufacturers (VFA), in Berlin, AMNOG could cut €2 ($2.6) billion a year from the industry's revenues. “This is the biggest crisis ever faced by the industry,” says VFA chief executive Cornelia Yzer. But Doris Pfeiffer, chief executive of the Association of Statutory Health Insurance Funds, in Berlin, says AMNOG would weaken the ability of individual health insurers to negotiate their own volume discounts, thus softening the blow to drug manufacturers. The UK also intends to introduce compulsory, value-based pricing of branded drugs starting in 2014. And this year Italy will enforce medicine price reductions totaling €1.3 ($1.7) billion.

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